☰A captive’s costs fall into two categories, funding capital and operating expenses. The funding side, the capital and premium you pay into the captive, is sized to your risk appetite with your actuary and regulator, and it stays yours. It funds an insurance company you own, pays its claims, and what remains builds as surplus on your balance sheet.
Operating expenses are the true running costs. Captive management, actuarial work, the annual audit, legal, accounting, and domicile fees, plus fronting and reinsurance placement where a program uses them. Many structures itemize or fragment those third-party costs across vendors, so the bill moves every year and cost creep is built in. Luzern consolidates all of it into one flat rate and shares a transparent pricing model before anything starts, so you know exactly what you will pay, with no surprises. Scoping the numbers for your program takes one conversation.